United States securities and exchange commission logo

                              April 20, 2021

       Melanie Vinson
       Chief Legal Officer
       Confluent, Inc.
       899 W. Evelyn Avenue
       Mountain View, California 94041

                                                        Re: Confluent, Inc.
                                                            Draft Registration
Statement on Form S-1
                                                            Submitted March 23,
                                                            CIK No. 0001699838

       Dear Ms. Vinson:

              We have reviewed your draft registration statement and have the
following comments. In
       some of our comments, we may ask you to provide us with information so
we may better
       understand your disclosure.

              Please respond to this letter by providing the requested
information and either submitting
       an amended draft registration statement or publicly filing your
registration statement on
       EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
       believe an amendment is appropriate, please tell us why in your

             After reviewing the information you provide in response to these
comments and your
       amended draft registration statement or filed registration statement, we
may have additional

       Draft Registration Statement on Form S-1 filed March 23, 2021

       Risk Factors
       Risks Related to Our Business and Operations, page 34

   1.                                                   You disclose that you
sell to U.S. federal, state, and local, as well as foreign and
                                                        governmental agency
customers. To the extent material, disclose the portion of your
                                                        revenue generated by
sales to government entities.
       Risks Related to Ownership of Our Class A Common Stock, page 58

   2.                                                   Please add disclosure
that addresses the risk that the dual class structure may render your
                                                        shares ineligible for
inclusion in certain stock market indices, which could adversely
                                                        affect share price and
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Confluent, Inc.
April 20, 2021
Page 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page

3.       You disclose that the dollar-based net retention rate decreased from
177% in 2018 to
         134% in 2019 to 125% in 2020. Please discuss the factors that led to
the decrease in
         dollar-based net retention rate over the three year period. Also
discuss whether this is a
         known material trend or uncertainty that will have, or is reasonably
likely to have, a
         material impact on your revenues.
Key Factors Affecting Our Performance
Contribution Margin Analysis, page 82

4.       We note your contribution margin analysis presentation. Please label
            Contribution Margin    as a non-GAAP measure and present the
disclosures and
         reconciliation required by Item 10(e)(1)(i) of Regulation S-K. Please
revise to clarify that
         this measure is prepared on a basis different from GAAP and address in
principle how
         your calculations differ from GAAP. Explain how you use this measure
to manage
         your business.
Results of Operations
Research and Development, page 89

5.       Please explain why you have included a portion of the stock-based
compensation costs
         related to the tender offer and secondary sale of your common and
convertible founder
         stock as research and development expenses.
Liquidity and Capital Resources, page 94

6.       Please revise your disclosures to focus on the primary drivers of and
other material factors
         necessary to understand your underlying cash flows and the indicative
value of historical
         cash flows. As an example, please revise to disclose your days sales
outstanding at each
         balance sheet date and the impact it has on your cash flows. We refer
you to Item
         303(a)(1) of Regulation S-K and Section IV.B of SEC Release No.
Critical Accounting Policies and Estimates
Common Stock Valuations, page 100

7.     Please provide us with a breakdown of all equity awards granted to date
in fiscal 2020 and
       leading up to the initial public offering including the fair value of
the underlying common
       stock used to value such awards as determined by your board of
directors. To the extent
FirstName LastNameMelanie Vinson
       there were any significant fluctuations in the fair values from
period-to-period, please
Comapany   NameConfluent,
       describe               Inc. that contributed to these fluctuations,
including any intervening
                for us the factors
April 20, 2021within
               Page 2the company or changes in your valuation assumptions or
FirstName LastName
 Melanie Vinson
Confluent, LastNameMelanie   Vinson
April       NameConfluent, Inc.
       20, 2021
April 320, 2021 Page 3
FirstName LastName
Business, page 117

8.       You disclose that your customers included 124 of the Fortune 500.
Please provide context
         regarding the significance of these customers by disclosing, for
example, whether they
         were among the 513 customers in 2020 that generated $100,000 or
greater in ARR or
         among the 56 customers in 2020 that generated $1.0 million or greater
in ARR.
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Accounts Receivable and Allowance for Doubtful Accounts, page F-10

9.       Please explain the payment terms typically stipulated in your
contractual arrangements
         with customers and discuss the typical payment history. Discuss the
underlying reasons
         for any significant instances of slow payment and receivables that
remain outstanding for
         lengthy periods. Please provide us with an aging of your accounts
receivable as of
         December 31, 2020, detailing the total amounts outstanding at the
balance sheet date
         by categories of time, such as over 30 days, over 60 days, over 90
days, over six months
         and over one year. For each category, show the amount that has been
Deferred Contract Acquisition Costs, page F-10

10.      Please help us understand whether you pay commissions to your reseller
and online
         marketplaces, and if so explain whether these commissions are
capitalized as deferred
         contract acquisition costs.
11.      Please clarify the nature of the related costs other than sales
commissions that are earned
         by the Company   s sales force. Explain how you determined that these
other costs are
         considered incremental and recoverable costs of obtaining a contract
with a customer. We
         refer you to ASC 340-40-25-1 through 25-3.
Revenue Recognition, page F-13

12.      Please clarify your disclosures that indicate subscription contracts
are generally non-
         cancelable and non-refundable. Describe any circumstances in which
         contracts are cancelable and refundable.
13.      We note that you generate a portion of your subscriptions and services
sales indirectly
         through resellers and online marketplaces. Please revise to disclose
the significant
         judgements made in evaluating when the customer obtains control in
these particular
         arrangements. We refer you to ASC 606-10-25-27 and 25-30 and ASC
14.      You state that you recognize a portion of your revenue from sales of
the Confluent
         Platform at a point in time, upon delivery and transfer of control of
the underlying license
         to the customer, with post-contract customer support, maintenance, and
upgrades, referred
 Melanie Vinson
Confluent, LastNameMelanie   Vinson
April       NameConfluent, Inc.
       20, 2021
April 420, 2021 Page 4
FirstName LastName
         to together as PCS, which comprises the substantial majority of the
revenue, recognized
         ratably over the subscription term. Explain how you determined that
the license
         has significant standalone functionality and is therefore deemed a
distinct performance
         obligation. Describe why the PCS comprises the substantial majority of
the revenue. We
         refer you to ASC 606-10-25-19 through 21 and ASC-10-55-62.
15.      You state that the majority of your revenue from Confluent Cloud in
2020 was based on
         usage-based minimum commitments and is recognized in the period that
the usage occurs
         based on the amount that you expect to be entitled to under the terms
of the
         subscription. Please help us better understand the minimum
commitments, and your
         pricing model and fee structure associated with your usage-based
minimum commitments
         offerings. For instance, explain whether your fee structure includes
both fixed and
         variable pricing depending upon the amount of usage.
16.      You state on page 26 that as certain of your customers or potential
customers experience
         downturns or uncertainty in their own business operations and revenue
resulting from the
         spread of COVID-19, they have and may continue to decrease or delay
their technology
         spending, request pricing concessions or payment extensions, or seek
renegotiations of
         their contracts, any of which have resulted in and may continue to
result in delayed or
         decreased revenue for you. Please explain how you account for these
pricing concessions,
         payment extensions and contract renegotiations.
Note 10. Revenue, page F-26

17.      Please tell us your consideration of disaggregating your revenue by
the timing of the
         goods or services (for example, revenue from goods or services
transferred to a customer
         at a point in time and revenue transferred to a customer over time)
and sales channel (for
         example, sales of your subscriptions and services directly through
your sales teams and
         self-service channel and indirectly through resellers and online
marketplaces). We refer
         you to ASC 606-10-55-91.
11. Stock Option Plans
Tender Offer and Secondary Sales, page F-30

18.      We note that in connection with a tender offer and secondary sales of
your common stock
         and convertible founder stock, stock-based compensation expense for
the year ended
         December 31, 2020 included $111.9 million of expense related to the
amount paid in
         excess over the estimated fair value of your common stock as of the
date of the
         transactions. We further note that each share of convertible founder
stock is convertible
         into redeemable convertible preferred stock if purchased by an
investor in conjunction
         with a round of preferred stock financing or if otherwise transferred
or sold, each share of
         convertible founder stock is convertible into Class B common stock,
except in the case of
         certain permitted transfers. Please help us better understand why you
recorded stock-
         based compensation expense in each of these transactions in excess of
the estimated fair
         value of your common stock. Clarify whether you recorded stock-based
 Melanie Vinson
Confluent, Inc.
April 20, 2021
Page 5
      expense in connection with the sales of the common stock since it would
seem that only
      the shares of convertible founder stock that were converted into shares
of Series E
      redeemable convertible preferred stock would have preferential rights,
which would seem
      to have a fair value in excess of the estimated fair value of your common
stock. Explain
      whether the exchange of common stock in these transactions was an
exchange of similar
      securities. Cite the specific guidance in ASC 718 that you relied upon in
making this

19.   Please supplementally provide us with copies of all written
communications, as defined in
      Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
      present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
      not they retain copies of the communication.
       You may contact Morgan Youngwood, Senior Staff Accountant, at (202)
551-3479 or
Stephen Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Alexandra Barone,
Staff Attorney, at (202) 551-8816 or Jan Woo, Legal Branch Chief, at (202)
551-3453 with any
other questions.

FirstName LastNameMelanie Vinson
                                                            Division of
Corporation Finance
Comapany NameConfluent, Inc.
                                                            Office of
April 20, 2021 Page 5
cc:       Jon Avina
FirstName LastName